The Bureau of Customs (BOC) has exempted certain Authorized Economic Operators (AEOs) from the mandatory use of electronic customs seals under its Electronic Tracking of Containerized Cargo (E-TRACC) system, in a move aimed at strengthening trade facilitation incentives.
Under Customs Memorandum Order (CMO) No. 4-2026, AEOs with Level 1 benefits are no longer required to use electronic customs seals (ECS) for shipments to and from free zones. The policy is designed to make AEO accreditation more attractive to compliant and trusted traders.
The E-TRACC system uses GPS-enabled electronic seals to monitor the real-time inland movement of containerized cargo, helping prevent diversion and tampering. While the system remains in place, the exemption reflects the BOC’s trust in AEO-certified firms with strong compliance records.
CMO 4-2026 amends Section 17 of CMO 9-2020, introducing a new provision that removes the ECS requirement for shipments handled by AEOs that are also registered as Registered Business Enterprises (RBEs) with Investment Promotion Agencies (IPAs) or other government bodies promoting investments.
The exemption applies to both air and sea cargo.
A corresponding amendment to Section 4.3 of CMO 4-2020, which established the E-TRACC system, reinforces that ECS is no longer required for eligible AEO shipments involving free zones.
Despite the exemption, the BOC clarified that the posting of a General Transportation Surety Bond through the Automated Bonds Management System remains mandatory for transit of containerized goods.
ECS requirements will continue to apply to other cargo movements, including transfers to container yards and freight stations, transit to inland customs facilities and bonded warehouses, exports from free zones to ports, and shipments subject to further verification.
The AEO Program grants accredited traders streamlined procedures, faster clearance, and reduced logistics costs, while enabling mutual recognition with other customs administrations.
To encourage wider participation, the BOC earlier released its “AEO Operational Guidelines,” outlining accreditation processes, categories, and benefits.
AEO accreditation is structured into three levels. Level 1 operators enjoy privileges such as exemption from accreditation renewal, self-assessment, supplementary goods declarations, and access to a dedicated help desk. Level 2 members benefit from dedicated lanes, advance clearance, and expedited export processing, while Level 3 members receive additional incentives as determined by the Customs Commissioner.
CMO 4-2026 takes effect 15 days after its issuance on April 7, 2026.